I always smile when I hear the more creative names of the programs that new managers conjure up in order to distinguish their change initiatives from those of their predecessors. Some recent examples that I've run across: "Work Made Better," " Partners in Progress," APEX and EXCELL.
I forget exactly what the letters stand for in the last two acronyms—I would guess that the employees at those two companies quickly forgot too—but it doesn't really matter. Such bold names reflect a genuine desire to improve the work culture and material flow, and figure out new ways of managing inventory better. There's nothing wrong with that.
Like any marketing slogan, if you make a bold promise, you eventually have to deliver. The fact that so many management programs don't achieve what they set out to achieve is what causes much of the cynicism and organizational inertia that must be overcome before any new initiatives can hope to have an impact.
While a catchy name may be a good start when launching a new management initiative, having everyone understand how the operation is currently performing in all areas is much more important. Such knowledge helps prioritize the countless opportunities for improvement.
With this thought in mind MHM has launched our second annual Census of Distribution. In conjunction with our research partners, The MPI Group (www.mpi-group.net) and Industry Insights (www.industryinsights.com), this project gives inventory managers a tool to help benchmark their operations internally, or against the competition.
As we have reported in previous issues, among other practices and metrics last year's study found that the median order cycle time (order release to shipment) for distribution facilities is 12 hours, the median on-time delivery rate is 97%, and the median inventory turn rate is 6.0 turns per year. Of course knowing that you're at or near the median doesn't help those organizations that rely on operational performance to give them an advantage in the marketplace. The managers of these operations have higher performance targets. They're aiming for the 75th percentile or higher: an order cycle time of 3 hours, an on-time delivery rate of 99% and an inventory turn rate of 12 turns per year.
I encourage you to download the form (www.2006COD.com), follow the instructions and enter your data online. It's not a simple survey fill out, but the data and the performance metrics that we request should be readily available to most warehouse and distribution center managers. Rest assured that all responses are completely anonymous.
As a unique incentive, participants in this year's Census of Distribution will receive immediate access to last year's database that allows you to benchmark your performance against peers based on criteria of your choosing. There's no need to wait for the research results to be tallied. You can use this data right away to help your organization set performance goals for 2007. Of course participants will also have access to this year's database after the final results have been tabulated.
How you achieve those 2007 goals will be the next challenge. Perhaps you could launch a new program with a catchy new name.
